scholarly journals Impact of effective governance structure on succession process in the family business: exploring the mediating role of management succession planning

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
V.V. Renuka ◽  
Bhasi Marath
Keyword(s):  
Family Business ◽  
Succession Planning ◽  
Family Firms ◽  
Governance Structure ◽  
Content Type ◽  
Mediating Role ◽  
Perceived Success ◽  
Management Succession ◽  
Succession Process

PurposeThe aim of this research is to analyze empirical evidence of the effect of governance structure (GS) on perceived success of the succession process. It is also reported that in India, family firms have a more informal organization structure and governance and have an informal and unplanned approach to bringing the successors into family business. Previous studies have reported that GS is an important factor for a successful succession process. This study examines the role of management succession planning as an intervening variable to achieve perceived success of the succession process.Design/methodology/approachData have been collected using a questionnaire schedule with 113 respondents who are successors from family business firms in Kerala, India. The study uses snowball sampling technique. Partial least square-structural equation modeling has been used to do data analysis.FindingsThe results of the study showed that GS has a significant positive effect on the success of the succession process. GS has a significant positive effect on management succession planning. Management succession planning partially mediates the relationship between GS and perceived success of the succession process.Research limitations/implicationsThe results of the study indicate the effect of GS on the relationship between, perceived success of the succession process and management succession planning. The mediating role of management succession planning in the above relationship is also confirmed. Therefore, before starting the succession process a good GS should be put in place for ensuring the success of the succession process. Family firms must implement the succession plan well to make the succession process successful.Originality/valueThe main contribution of the study is to empirically investigate the effect of GS and management succession planning to enhance the success of the succession process.

Passing on the legacy: exploring the dynamics of succession in family businesses in Pakistan

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Asma AbdulRahim Chang ◽  
Muhammad Shujaat Mubarik ◽  
Navaz Naghavi
Keyword(s):  
Family Business ◽  
Succession Planning ◽  
Design Methodology ◽  
Family Firms ◽  
Family Members ◽  
Family Businesses ◽  
Content Type ◽  
Traditional Family ◽  
Interviewing Technique

PurposeBy taking the theory of entrepreneurial legacy as the baseline, this study explores the various aspects of succession planning in indigenous family businesses especially the role of female family members in succession and conflicts in family businesses.Design/methodology/approachThe study is qualitative in nature and adopts narrative inquiry to explore the aspects of succession planning. In doing so, the study utilizes an in-depth interviewing technique with nine participants who run their family-owned firms which are mostly in their second or third generation for analysis.FindingsThe findings are concurrent with the literature that indicates a lack of strategic succession planning although ordinary or natural succession does occur in some firms. The study also reports a lack of consideration for female members in succession, daughters in particular, for traditional family firms (FFs) in contrast to entrepreneurial FFs.Research limitations/implicationsThe study has many implications for family-owned firms in Pakistan as they need to align their family business with the theory of entrepreneurial legacy and its three strategic activities in order to ensure the longevity of their business.Originality/valueExploring how succession planning takes place in family indigenous family businesses and what is the role of female family members in succession and conflicts in family businesses are original contributions of this study.

Family protocol: how it shapes succession in family firms

2018 ◽  
Vol 41 (3) ◽  
pp. 35-44
Author(s):  
Cláudia Matias ◽  
Mário Franco
Keyword(s):  
Family Business ◽  
Succession Planning ◽  
Family Firms ◽  
Planning Process ◽  
Content Type ◽  
Documentary Analysis ◽  
The Family ◽  
Succession Process ◽  
Practical Implications

Purpose This study aims to understand the role that family protocol can have in the succession planning process of family businesses. Design/methodology/approach For this purpose, the authors decided on a qualitative approach and performed an exploratory case study in Portugal: one firm with a family protocol. As data collection techniques, interviewing, direct observation and documentary analysis were used. Findings Based on the empirical evidence, it is concluded that a family protocol can help succession planning and favour the continuity and survival of the family business. Practical implications This study shows the relevance of a family protocol for the succession process that seems to be at the basis of family firms’ continuity, survival and minimising their failure. Originality/value Although family firms are many in number and central in the dynamics of the world economy, the family protocol has not been approached as a determinant of a successful succession process. This holds particularly for the realm of family firms.

scholarly journals Beyond agency and stewardship theory: shareholder–manager relationships and governance structures in family firms

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ann Sophie K. Löhde ◽  
Giovanna Campopiano ◽  
Andrea Calabrò
Keyword(s):  
Social Exchange ◽  
Family Business ◽  
Social Exchange Theory ◽  
Family Firms ◽  
Governance Structure ◽  
Managerial Behavior ◽  
Exchange System ◽  
Content Type ◽  
The One ◽  
Over Time

PurposeChallenging the static view of family business governance, we propose a model of owner–manager relationships derived from the configurational analysis of managerial behavior and change in governance structure.Design/methodology/approachStemming from social exchange theory and building on the 4C model proposed by Miller and Le Breton-Miller (2005), we consider the evolving owner–manager relationship in four main configurations. On the one hand, we account for family businesses shifting from a generalized to a restricted exchange system, and vice versa, according to whether a family manager misbehaves in a stewardship-oriented governance structure or a nonfamily manager succeeds in building a trusting relationship in an agency-oriented governance structure. On the other hand, we consider that family firms will strengthen a generalized exchange system, rather than a restricted one, according to whether a family manager contributes to the stewardship-oriented culture in the business or a nonfamily manager proves to be driven by extrinsic rewards. Four scenarios are analyzed in terms of the managerial behavior and governance structure that characterize the phases of the relationship between owners and managers.FindingsVarious factors trigger managerial behavior, making the firm deviate from or further build on what is assumed by stewardship and agency theories (i.e. proorganizational versus opportunistic behavior, respectively), which determine the governance structure over time. Workplace deviance, asymmetric altruism and patriarchy on the one hand, and proorganizational behavior, relationship building and long-term commitment on the other, are found to determine how the manager behaves and thus characterize the owner's reactions in terms of governance mechanisms. This enables us to present a dynamic view of governance structures, which adapt to the actual attitudes and behaviors of employed managers.Research limitations/implicationsAs time is a relevant dimension affecting individual behavior and triggering change in an organization, one must consider family business governance as being dynamic in nature. Moreover, it is not family membership that determines the most appropriate governance structure but the owner–manager relationship that evolves over time, thus contributing to the 4C model.Originality/valueThe proposed model integrates social exchange theory and the 4C model to predict changes in governance structure, as summarized in the final framework we propose.

External knowledge sourcing and innovation in family firms

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Manzoor Ul Akram ◽  
Koustab Ghosh ◽  
Rojers P. Joseph
Keyword(s):  
Social Capital ◽  
Absorptive Capacity ◽  
Product Innovation ◽  
Family Firms ◽  
Family Firm ◽  
Content Type ◽  
External Knowledge ◽  
Mediating Role ◽  
Realized Absorptive Capacity

Purpose This study aims to investigate the external knowledge search behaviors in terms of search breadth and search depth in family firms and the resultant product innovation in Indian context. The authors theorize the mediating role of absorptive capacity (potential and realized absorptive capacity) between knowledge sourcing from external sources and product innovation. Further, the authors examine the moderating role of crucial internal social capital of the family firm in enhancing the use of external knowledge for firm innovation activities. Design/methodology/approach The study uses a quantitative research design taking single informant for collection of data from 151 family small and medium enterprises in automotive sector in India. The authors use structural equation modeling to test hypothesized relationships. Findings The findings indicate that both search breadth and search depth of family firms are positively associated with product innovation in family firms. The authors also find evidence for partial mediating role of potential and realized absorptive capacity in the relationship between search breadth and innovation and search depth and innovation. The results show how family firms learning taking place while scanning external knowledge sources in terms of external absorptive capacity routines. Finally, the authors find that family firm internal social capital positively moderate the relationship between search breadth and depth, and product innovation. Practical implications Family firms need to innovate to remain relevant in the long-run and as such development of superior capabilities is of great significance to them. Family firm managers must be open to external knowledge as such knowledge help them improve the firm level of innovation through absorptive capacity. Further, family firms must realize and act upon the importance of their social capital for the integration and utilization of acquired knowledge. Originality/value This paper is amongst a few papers that take dynamic capability views of innovation in family firms wherein the authors theorize how external search breadth and depth lead to the development of potential and realized absorptive capacity in family firms. The importance of family firm internal social capital as a strong integrating and knowledge sharing mechanism that helps family firms transform external knowledge into innovation is also highlighted.

Passing the baton

2016 ◽  
Vol 24 (3) ◽  
pp. 35-37 ◽  
Author(s):  
Pauline Drury
Keyword(s):  
Family Business ◽  
Succession Planning ◽  
Family Firms ◽  
Longitudinal Research ◽  
Panel Discussion ◽  
Psychological Impact ◽  
Food Group ◽  
Content Type ◽  
Factors Affecting ◽  
The Family

Purpose The purpose of this paper is to consider the factors affecting the success of succession planning in family businesses. Design/methodology/approach The study reports on a panel discussion in which the former chairman of the William Jackson Food Group describes the processes put in place to manage succession at this family firm and his own experience of handing over to his successor. Findings Once upon a time, saying that you were going into the family business marked the end of any career discussion. Now it’s just the beginning – interest in family firms has never been greater. Succession planning is a subject guaranteed to generate questions – everyone wants to know how to get it right. Fortunately, it’s an area where some are happy to share their experience. Research limitations/implications The paper highlights the need for more longitudinal research on family firms. Practical implications This paper provides a practical guide to structures and processes that can facilitate succession planning in family firms. Social implications It draws attention to the emotional and psychological impact of succession on the retiring individual and the need to create life structures to replace former business involvement. Originality/value This paper aims to present a frank discussion of the approach to succession planning taken by one family business and the broader research questions that it raises.

La comunicazione come fattore strategico nell'azienda familiare

2009 ◽  
pp. 153-171
Author(s):  
Walter Zocchi
Keyword(s):  
Family Business ◽  
Family Firms ◽  
Minor Importance ◽  
Business Decision ◽  
Two Generations ◽  
Managerial Implications ◽  
The Common ◽  
Succession Process ◽  
The Difference

- The succession process, is one of the main themes of Family Business. The literature widely analysed this topic through the identification of the factors that characterized successful intergenerational transfers. This research, on the contrary, wants to go further the common rationalization of assets, governance and the successor's experiences and knowledge, analysing elements usually considered of minor importance but that, in our opinion can make the difference becoming strategic elements. In particularly, will be deepened the role of communication in the passage of the business to the next generation. Beginning with the examination of the literature, this essay aims to give a theoretical framework to better understand the results of an empirical study - on a representative sample of Italian family firms - which main aim was to study the organizational and managerial implications caused by the presence two generations of entrepreneurs and the role of communication in business decision processes.

The family CEO’s effect on succession planning: founder status, difficulties with letting go and gender differences

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ine Umans ◽  
Nadine Lybaert ◽  
Tensie Steijvers ◽  
Wim Voordeckers
Keyword(s):  
Family Business ◽  
Succession Planning ◽  
Family Firms ◽  
Chief Executive ◽  
Relational Theory ◽  
Content Type ◽  
The Family ◽  
Letting Go ◽  
And Gender ◽  
Gender Influences

Purpose The purpose of this paper is to investigate several antecedents of succession planning in family firms: founder status, the family chief executive officer (CEO)’s inability to let go and the family CEO’s gender. Design/methodology/approach This study conducts moderated mediation analysis on a sample of 259 family firms. Findings The results show that family firms led by founders show lower succession planning levels than family firms led by descendant family CEOs. This effect is mediated by the family CEO’s inability to let go. Furthermore, the influence of the emotion of being unable to let go on succession planning is dependent on the family CEO’s gender. This influence is smaller when the family CEO is female than when the family CEO is male. Originality/value The study introduces the family CEO’s inability to let go as a mediator in the founder-succession planning relationship. The results add empirical evidence to the debate about gender influences in family firms. By showing that emotions have a different outcome concerning succession planning depending on the family CEO’s gender, this study enriches gender research. The study also contributes to the family business field by introducing relational theory as a valuable theoretical framework to include gender in succession research.

Do dissimilarities in the family involvement in family firms lead to different levels of indebtedness? Evidence from Spain

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
María Comino-Jurado ◽  
Sonia Sánchez-Andújar ◽  
Purificación Parrado-Martínez
Keyword(s):  
Family Involvement ◽  
Family Business ◽  
Design Methodology ◽  
Family Firms ◽  
Governance Structure ◽  
Three Dimensions ◽  
Content Type ◽  
The Family ◽  
Family Business Group ◽  
Different Levels

PurposeThis paper examines how differences in the family involvement in a family business can influence its level of indebtedness. Assuming the influence of family is not the same for all family firms, we consider each company as a combination of the family involvement in three dimensions of the business: ownership, management and governance structure.Design/methodology/approachUsing the partial least squares technique allows us to address the heterogeneity of family firms through an integral concept of family involvement in business that jointly considers the level of family participation in the ownership, management and governance structure of each firm.FindingsOur results demonstrate that the level of family involvement in a family firm, considering the heterogeneity existing within the family business group, directly influences its level of indebtedness. In addition, we find that family involvement in ownership and governance structures individually considered are positively related to the level of indebtedness of the family business.Originality/valueOur findings prove that some indebtedness patterns, which previous literature has described as common to all Spanish family businesses, may actually be valid only for specific family firms with a particular level of family involvement. In addition, the way of measuring family business heterogeneity through our integral concept of family involvement can be replicated by other authors because of the manageability of the items, thus contributing to an increased understanding of the effects of family involvement in firms' development.

scholarly journals The father’s role in supporting the son’s business knowledge development process in Vietnamese family businesses

2019 ◽  
Vol 11 (2) ◽  
pp. 258-276 ◽  
Author(s):  
Thanh Trung Pham ◽  
Robin Bell ◽  
David Newton
Keyword(s):  
Family Business ◽  
Development Process ◽  
Second Generation ◽  
Family Businesses ◽  
Knowledge Development ◽  
Content Type ◽  
The Family ◽  
Business Knowledge ◽  
Succession Process

Purpose Many family businesses do not survive into the second generation. A common reason put forward for this is poor succession planning for the second generation. This paper is designed with the aim to explore the role of the father in supporting the son’s business knowledge and development in Vietnamese family businesses. Design/methodology/approach This research adopted an inductive qualitative approach using multiple face-to-face semi-structured interviews with five father–son succession pairs. The interview participants were a cross section of Vietnamese family businesses, where the father–son pair was involved in the process of business knowledge transfer and the succession process was at an advanced stage. Findings The results suggest that the father plays different roles at different stages of the son’s business knowledge development process. In particular, the father acts as an example during the son’s childhood; a supporter to encourage the son to gain more business knowledge from both formal education and working experience outside the family business; a mentor and trouble-shooter after the son joins the family business as a full-time employee; and as an advisor after the son becomes the leader of the firm. Originality/value Most Vietnamese family businesses are still operating under the control of the first generation, and as a result, research into the succession process in Vietnam can help to provide valuable insights. Furthermore, existing research into the role of the predecessor in the whole process from the successor’s childhood until the end of the succession process is ambiguous and requires further research to clarify this research gap.

The role of cooperation agreements in the internationalization of Spanish winery and olive oil family firms

2019 ◽  
Vol 31 (4) ◽  
pp. 555-577 ◽  
Author(s):  
Valeriano Sanchez-Famoso ◽  
Myriam Cano-Rubio ◽  
Guadalupe Fuentes-Lombardo
Keyword(s):  
Olive Oil ◽  
Family Involvement ◽  
Family Firms ◽  
International Strategy ◽  
Content Type ◽  
Oil Companies ◽  
Mediating Role ◽  
High Level ◽  
The Relationship

Purpose This study aims to identify the mediating role of cooperation agreements in the relationship between family involvement in international firms and their level of international commitment. Design/methodology/approach The study focuses on Spanish international wine and olive oil companies that have varying levels of family involvement. The final sample consists of 263 companies. SmartPLS was used to perform the analysis. Findings A higher level of family involvement in business implies greater difficulties with cooperation agreements. Additionally, family involvement is negatively associated with the firm’s level of international commitment, and the perceived difficulties of cooperation agreements mediate this relationship. Practical implications This study is of interest to business managers with different levels of family involvement. The study clarifies their perceptions of cooperation agreements and international business commitment. Managers of firms with a high level of family involvement should emphasize the multiple benefits of cooperation agreements for international strategy performance rather than the drawbacks of cooperation. Additionally, through cooperation, companies can learn about destination markets, which may help them to focus their resources effectively in those markets. Originality/value This study contributes to the literature on the internationalization strategies of family businesses. This study is the first to address the mediating role of cooperation agreements in the relationship between family involvement and international commitment.

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